Under a finance lease, title to the goods remains with the leasing firm. Thus, there is no supply of goods and a finance lease is treated as a supply of a service.

In Eon Aset Menidjmunt OOD v Direktor na Direktsia ‘Obzhalvane i upravlenie na izpalnenieto’ – Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite (Case C-118/11) [2012] BVC 407, doubts were raised about this. HMRC Brief 37/2012(3 January 2013) announced that they were considering the matter and, if changes are necessary, ‘HMRC will only apply any changes from a future date’.

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